AMETEK Announces First Quarter Results

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May 5, 2020 at 6:55 AM EDT

AMETEK Announces First Quarter Results

BERWYN, Pa., May 5, 2020 /PRNewswire/ -- AMETEK, Inc. (NYSE: AME) today announced its financial results for the first quarter ended March 31, 2020.

AMETEK's first quarter 2020 sales were $1.20 billion, a 6.6% decline compared to the first quarter of 2019. GAAP operating income was $232.0 million. Adjusted operating income was $276.0 million, down 3% versus last year's first quarter, with adjusted operating margins of 23.0%, an increase of 100 basis points over the prior year.

On a GAAP basis, first quarter earnings per diluted share were $1.22. Adjusted earnings were $1.02 per diluted share, up 2% versus the first quarter of 2019. Adjusted earnings adds back non-cash, after-tax, acquisition-related intangible amortization of $0.13 per diluted share, and excludes a pre-tax $141 million, or $0.47 per diluted share, gain from the sale of Reading Alloys and a pre-tax $44 million, or $0.15 per diluted share, realignment charge. A reconciliation of reported GAAP results to adjusted results is included in the financial tables accompanying this release and on the AMETEK website.

"We are pleased with the way our colleagues have responded to the unprecedented personal and professional challenges presented by the COVID-19 pandemic," commented David A. Zapico, AMETEK Chairman and Chief Executive Officer. "The safety and well-being of our employees remains our top priority. To that end, we have implemented significant safety measures to help safeguard our employees while also providing continued support for our essential customers."

"Although first quarter sales were impacted by the spread of COVID-19, our businesses reacted swiftly and our proven operating capability allowed us to expand adjusted operating margins 100 basis points and deliver earnings in-line with expectations," Mr. Zapico continued. "Additionally, AMETEK's operating cash flow in the quarter was excellent at $271 million, up 38% over the first quarter of 2019. This cash generation, along with proceeds from the sale of Reading Alloys, have strengthened AMETEK's already strong balance sheet."

Electronic Instruments Group (EIG)
First quarter EIG sales were $774.2 million, down 4% compared to the same period in 2019. On a GAAP basis, EIG's first quarter 2020 operating income was $171.3 million. Excluding realignment costs, first quarter EIG operating income was $194.1 million and operating margins were 25.1% in the quarter.

"While recent acquisitions, including Rauland, Mocon, Telular and Gatan continue to deliver solid performance given the attractive, secular growth opportunities in markets they serve, EIG sales were negatively impacted as the coronavirus spread globally during the quarter. Despite lower than expected sales, our businesses delivered strong operating performance and core margin expansion," noted Mr. Zapico.

Electromechanical Group (EMG)
EMG sales in the first quarter were $428.0 million, down 11% compared to last year's first quarter. On a GAAP basis, EMG first quarter operating income was $76.6 million. Excluding realignment costs, EMG's operating income was $97.5 million and operating income margins were a record 22.8%.

"Despite a challenging macro environment due to the spread of the coronavirus, EMG delivered exceptional operating performance in the quarter. By proactively driving Operational Excellence initiatives, EMG achieved impressive operating margins in the quarter," commented Mr. Zapico.

Long-term Outlook
"Given the uncertainty related to the timing and magnitude of the COVID-19 pandemic, we previously withdrew our full year financial guidance provided on February 5, 2020," noted Mr. Zapico. "We will provide forward guidance when visibility improves."

"While these are historically uncertain times, we remain focused on delivering long-term, sustainable success for our shareholders, colleagues, customers and suppliers, and the communities where we operate. The AMETEK Growth Model is adaptable and provides our businesses with the tools needed to successfully navigate uncharted economic environments," noted Mr. Zapico.

"We are well positioned to manage this challenge with a portfolio of outstanding businesses that provide our customers with innovative solutions. The niche markets our businesses serve today are diverse, our operating capabilities are robust and proven, and we have a strong, flexible balance sheet and excellent liquidity. Most importantly, we have a world-class workforce dedicated to our mission of solving our customers' most complex challenges with differentiated technology solutions. We are confident in AMETEK's future," Mr. Zapico concluded.

Conference Call
AMETEK will webcast its first quarter 2020 investor conference call on Tuesday, May 5, 2020, beginning at 8:30 AM ET. The live audio webcast will be available and later archived in the Investors section of www.ametek.com.

About AMETEK
AMETEK is a leading global manufacturer of electronic instruments and electromechanical devices with 2019 sales of approximately $5.0 billion. The AMETEK Growth Model integrates the Four Growth Strategies - Operational Excellence, New Product Development, Global and Market Expansion, and Strategic Acquisitions - with a disciplined focus on cash generation and capital deployment. AMETEK's objective is double-digit percentage growth in earnings per share over the business cycle and a superior return on total capital. The common stock of AMETEK is a component of the S&P 500.

Forward-looking Information
Statements in this news release relating to future events, such as AMETEK's expected business and financial performance are "forward-looking statements." Forward-looking statements are subject to various factors and uncertainties that may cause actual results to differ significantly from expectations. These factors and uncertainties include risks related to COVID-19 and its potential impact on AMETEK's operations, supply chain, and demand across key end markets; AMETEK's ability to consummate and successfully integrate future acquisitions; risks with international sales and operations, including supply chain disruptions; AMETEK's ability to successfully develop new products, open new facilities or transfer product lines; the price and availability of raw materials; compliance with government regulations, including environmental regulations; changes in the competitive environment or the effects of competition in our markets; the ability to maintain adequate liquidity and financing sources; and general economic conditions affecting the industries we serve. A detailed discussion of these and other factors that may affect our future results is contained in AMETEK's filings with the U.S. Securities and Exchange Commission, including its most recent reports on Form 10-K, 10-Q and 8-K. AMETEK disclaims any intention or obligation to update or revise any forward-looking statements.

Contact:
AMETEK, Inc.
Kevin Coleman
Vice President, Investor Relations
1100 Cassatt Road
Berwyn, Pennsylvania 19312
kevin.coleman@ametek.com 
Phone: 610.889.5247


 

AMETEK, Inc.

Consolidated Statement of Income

(In thousands, except per share amounts)

(Unaudited)



 Three Months Ended


 March 31,


2020


2019

Net sales

$1,202,218


$1,287,691





Cost of sales

824,647


851,307

Selling, general and administrative

145,531


153,125

     Total operating expenses

970,178


1,004,432





Operating income

232,040


283,259





Interest expense

(22,741)


(22,653)

Other income (expense), net

141,776


(3,668)





Income before income taxes

351,075


256,938





Provision for income taxes

70,459


52,670





Net income

$   280,616


$   204,268





Diluted earnings per share

$        1.22


$        0.89

Basic earnings per share

$        1.23


$        0.90





Weighted average common shares outstanding:




     Diluted shares

230,872


228,686

     Basic shares

228,962


226,861





Dividends per share

$        0.18


$        0.14

 

 

AMETEK, Inc.

Information by Business Segment

(In thousands)

(Unaudited)



 Three Months Ended


 March 31,


2020


2019

Net sales:




     Electronic Instruments

$   774,225


$   806,911

     Electromechanical

427,993


480,780

          Consolidated net sales

$1,202,218


$1,287,691





Operating income:




Segment operating income:




     Electronic Instruments

$   171,271


$   203,084

     Electromechanical

76,564


98,813

          Total segment operating income

247,835


301,897

     Corporate administrative expenses

(15,795)


(18,638)

          Consolidated operating income

$   232,040


$   283,259

 


 

AMETEK, Inc.

Condensed Consolidated Balance Sheet

(In thousands)



 March 31,


 December 31,


2020


2019


 (Unaudited)



ASSETS




Current assets:




     Cash and cash equivalents

$  1,253,382


$     393,030

     Receivables, net

712,195


744,760

     Inventories, net

654,298


624,567

     Other current assets

154,616


263,414

          Total current assets

2,774,491


2,025,771





Property, plant and equipment, net

534,786


548,908

Right of use asset, net

168,543


179,679

Goodwill

4,075,633


4,047,539

Other intangibles, investments and other assets

3,048,493


3,042,662

          Total assets

$10,601,946


$  9,844,559





LIABILITIES AND STOCKHOLDERS' EQUITY




Current liabilities:




     Short-term borrowings and current portion of long-term debt, net

$     510,792


$     497,449

     Accounts payable and accruals

966,879


928,409

          Total current liabilities

1,477,671


1,425,858





Long-term debt, net

2,741,798


2,271,292

Deferred income taxes and other long-term liabilities

1,056,474


1,031,917

Stockholders' equity

5,326,003


5,115,492

          Total liabilities and stockholders' equity

$10,601,946


$  9,844,559

 


 

AMETEK, Inc.

Reconciliations of GAAP to Non-GAAP Financial Measures

(In thousands, except per share amounts)

(Unaudited)











Three Months Ended





March 31,





2020


2019









EIG Segment operating income (GAAP)


$       171,271


$        203,084



Realignment costs


22,846


-


Adjusted EIG Segment operating income (Non-GAAP)


$       194,117


$        203,084









EMG Segment operating income (GAAP)


$         76,564


$          98,813



Realignment costs


20,890


-


Adjusted EMG Segment operating income (Non-GAAP)


$         97,454


$          98,813









Operating income (GAAP)


$       232,040


$        283,259



Realignment costs


43,928


-


Adjusted Operating income (Non-GAAP)


$       275,968


$        283,259









Income before income taxes (GAAP)


$       351,075


$        256,938



Realignment costs


43,928


-



Gain from sale of Reading Alloys


(141,020)


-


Adjusted Income before income taxes (Non-GAAP)


$       253,983


$        256,938









Net income (GAAP)


$       280,616


$        204,268



Realignment costs


43,928


-



Income tax benefit on realignment costs


(10,293)


-



Gain from sale of Reading Alloys


(141,020)


-



Income tax expense on sale of business


31,446


-


Adjusted Net income (Non-GAAP)


$       204,677


$        204,268









Diluted earnings per share (GAAP)


$            1.22


$              0.89



Realignment costs


0.19


-



Income tax benefit on realignment costs


(0.04)


-



Gain from sale of Reading Alloys


(0.61)


-



Income tax charge on gain on sale of Reading Alloys


0.14


-



Pretax amortization of acquisition-related intangible assets


0.17


0.14



Income tax benefit on amortization of acquisition-related intangible assets


(0.04)


(0.03)



Rounding


(0.01)


-


Adjusted Diluted earnings per share (Non-GAAP)


$            1.02


$              1.00









EIG Segment operating margin (GAAP)


22.1%


25.2%



Realignment costs


3.0%


-


Adjusted EIG Segment operating margin (Non-GAAP)


25.1%


25.2%









EMG Segment operating margin (GAAP)


17.9%


20.6%



Realignment costs


4.9%


-


Adjusted EMG Segment operating margin (Non-GAAP)


22.8%


20.6%









Operating income margin (GAAP)


19.3%


22.0%



Realignment costs


3.7%


-


Adjusted Operating income margin (Non-GAAP)


23.0%


22.0%









Use of Non-GAAP Financial Information

The Company supplements its consolidated financial statements presented on a U.S. generally accepted accounting principles ("GAAP") basis with certain non‑GAAP financial information to provide investors with greater insight, increased transparency and allow for a more comprehensive understanding of the information used by management in its financial and operational decision-making.  Reconciliation of non‑GAAP measures to their most directly comparable GAAP measures are included in the accompanying financial tables. These non‑GAAP financial measures should be considered in addition to, and not as a replacement for, or superior to, the comparable GAAP measure, and may not be comparable to similarly titled measures reported by other companies.

The Company believes that these measures provide useful information to investors by reflecting additional ways of viewing AMETEK's operations that, when reconciled to the comparable GAAP measure, helps our investors to better understand the long-term profitability trends of our business, and facilitates easier comparisons of our profitability to prior and future periods and to our peers. 

 

 

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SOURCE AMETEK, Inc.

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(Common Stock)

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